When Did You Last Read Your Will? Why 2026 Is the Year to Look Again

A Will is a snapshot, not a settlement

We first published a guide to Wills on this blog in 2023. Much of it holds good, but the tax landscape around it has been rebuilt in the interval, and a document drafted on the old assumptions may now produce results its maker never intended. This article restates the position as at August 2026, and explains why the two years ahead matter more than the two behind.

When life moves on, your Will does not

Marriage or a civil partnership revokes a Will automatically, unless the Will was expressly made in contemplation of it. The rule has enabled the cruelty known as predatory marriage, where a vulnerable person is married quietly and a carefully made Will dies with the ceremony. Divorce operates differently: it does not revoke the Will, but a former spouse is treated as having died first for the purposes of any gift or appointment, which can leave unintended gaps in the structure.

Births, deaths, estrangements, a new business, a property abroad, a partner never married: each of these can pull a Will out of alignment with the life it was meant to serve. English law makes no automatic provision for an unmarried partner, however long the relationship.

If there is no Will at all

The intestacy rules then decide. A surviving spouse or civil partner takes the personal chattels, a statutory legacy of £322,000 and half of the residue, with the other half passing to children at eighteen. An unmarried partner takes nothing, and is left to an uncertain claim under the Inheritance (Provision for Family and Dependants) Act 1975. Intestacy is a formula, and formulas take no account of the shape of a particular family.

The frozen thresholds

The nil rate band remains £325,000 and the residence nil rate band £175,000. At Autumn Budget 2025 the freeze on both was extended by a further year, to April 2031. Asset values continue to rise while the thresholds do not, and the practical effect is that estates never conceived of as taxable are drawn into charge with each passing year.

Agricultural and business property, changed in April 2026

The reform of agricultural property relief and business property relief took effect on 6 April 2026. The allowance for 100 per cent relief is £2.5 million, raised from the £1 million originally announced when the Government revisited the figure on 23 December 2025, and enacted in the Finance Act 2026. It is transferable between spouses and civil partners, so a couple may shelter up to £5 million between them. Above the allowance relief falls to 50 per cent, producing an effective rate of 20 per cent, and the tax may be paid by ten interest free annual instalments, now extended to all qualifying agricultural and business property. Shares not listed on a recognised exchange, including those on AIM, attract 50 per cent relief irrespective of the allowance. Gifts made on or after 30 October 2024 are caught by transitional rules where the donor dies on or after 6 April 2026 and within seven years.

Pensions enter the estate in April 2027

This is the change with the widest reach. The Finance Act 2026, which received Royal Assent on 18 March 2026, brings unused pension funds into the estate as notional pension property for deaths on or after 6 April 2027. Deaths before that date are unaffected, whenever the money is actually paid out.

Caught are unused money purchase funds, drawdown funds, uncrystallised funds lump sum death benefits, annuity protection lump sums, remaining guaranteed instalments, and dependants' and nominees' annuities and drawdown. Outside the charge are death in service benefits where the member was employed at death, dependants' scheme pensions, charity lump sum death benefits, joint life annuities and trivial commutation lump sums. Agricultural and business property relief do not apply to notional pension property, so a business owner's pension takes no shelter from the reliefs that protect the rest of the estate.

What this means for the surviving beneficiary

For a surviving spouse or civil partner the position is unchanged in substance. The spouse exemption applies to pensions as to everything else, provided the survivor is a long term UK resident under the residence based regime that replaced domicile in April 2025. A pension nominated to a spouse passes without inheritance tax.

For any other beneficiary the position is materially worse, and in three layers. There is the inheritance tax charge itself. There is income tax at the beneficiary's marginal rate on what is drawn where the member died aged seventy five or over, though the regulations prevent true double taxation by disregarding the portion equivalent to the inheritance tax paid. And there is the residence nil rate band taper, which is the layer most often missed. Pension value counts towards the £2 million threshold at which that band is withdrawn at £1 for every £2 of excess. An estate comfortably below the threshold on its other assets may cross it once the pension is added, losing up to £350,000 of relief across a couple and taxing property that would never otherwise have been taxed. Commentators have modelled effective marginal rates in the region of 89 to 91 per cent where these features combine unhappily.

The burden on executors

Personal representatives are responsible for reporting and paying the tax on notional pension property, with beneficiaries jointly and severally liable once benefits vest in them. Scheme administrators are only jointly liable if they ignore a valid notice. Administrators must provide a valuation within twenty eight days of request. A personal representative may serve a withholding notice requiring up to half the benefit to be held back for up to fifteen months from the end of the month of death, and a beneficiary may require the administrator to pay the tax directly to HMRC, which must be actioned within thirty five days. The tax remains due at the end of the sixth month after death, with interest running thereafter.

One consequence deserves emphasis. Expressions of wish and nomination forms now drive the tax outcome, and they sit outside the Will entirely. Any review that examines the Will but never asks to see the nomination is incomplete.

The law of Wills itself

The Law Commission published Modernising Wills Law in May 2025, with a draft Bill. It recommends that electronic Wills be capable of formal validity, that revocation by marriage be abolished, that courts be empowered to uphold documents recording settled testamentary intentions, that capacity be tested under the Mental Capacity Act 2005, and that the minimum age fall to sixteen. The Government has not yet brought forward legislation, and the Law Society has publicly pressed it to do so. Until Parliament acts the formalities of 1837 govern: writing, signature, and two witnesses present at the same time. Reform is anticipated, but no one should plan an estate around a Bill that has not passed.

Reading a Will with fresh eyes

Are the executors still willing, able and living? Are guardians named for children who were infants at the time and are no longer? Are there specific gifts of things long since sold? Do the shares of residue still reflect the family as it now stands? Is there property abroad, or a business, that the Will does not address? And, in light of April 2027, does anyone know what pensions exist, and where the nomination forms point?

A Will is a snapshot of a family, its assets and the law on the day it was signed. All three have moved, and the law is moving still.

About the author: Dr Aamir Nawaz, LLB (Hons), LLM, PhD, Solicitor, Barrister (np) and Notary Public.